Manchester Spotlight

Recent research on the Manchester office market by GVA, points to a rising demand for office space in the city. After a record 1.3m sq ft of office take-up in 2014, there were deals totaling 320,000 sq ft in the first quarter of 2015, including lettings to PWC, EY, Bupa, Trowers Hamlyn, Home Office (UK Visas), Citation and Rental Cars.

The future of office demand in Manchester is looking bright with Metropolis tracking up to 50 active searches in Manchester, including requirements by Freshfields, Shoosmiths and Aviva. Research by Metropolis has revealed that the largest sector for office demand in the city comes from professional services firms (accountants, law firms, consultants etc); this is followed by business services, financial services and media. Metropolis is also tracking 150 upcoming lease expiries in Manchester over the next two years, many of which could result in searches. Local agents also point to a number of inward investments and branch office openings into the city. As a result prime office rents have risen from £30 psf to £32 psf in recent months.

The demand upsurge has prompted a new wave of Manchester office construction, which now encompassess 850,000 sq ft of office space underway in the city. New office scheme starts include the 267,000 sq ft No 1 Spinningfields following a 50,000 sq ft pre-let to PwC plus One New Bailey (125,000 sq ft), 101 The Embankment (165,000 sq ft), The Cotton Building (165,000 sq ft), First Street (150,000 sq ft) and Two Peter’s Square (161,000 sq ft). However most are at an early stage, as a result there are no major completions until the second half of 2016.

In conclusion, recently released statistics show a healthy 5% per annum increase in Manchester private sector office employment between 2009 and 2014, which is greater than London. Future GDP growth is forecast at 3.5% per annum, better than the UK average at 2.8%. The general consensus is that the growth in the market and the age of a proportion of existing buildings, means that there are up to 1m sq ft of ‘grade A’ office requirements in Manchester, together with a number of longer term strategic requirements.